I'm gonna give an unpopular opinion here to all the blind bulls for gloves. Tip, don't hold on to a loser. Averaging down, buy the dip etc are just sunk cost fallacy. Just cut loss, why lose more money as gloves drop further.

Everyone so surprised about analysts downgrading to sub RM2, technical 'analysis' constantly predicting a rebound (as good as astrology for me). Every broken support confirm got sifu come in and say more support, buy more.

Just look at precovid quarterly revenue, compare to covid, and then the most recent quarter. Doesn't take a genius with computers to see that the covid spike in sales is most likely gonna be a one-off thing. ASP price data also shows continuous trend towards normality ie precovid. Doing a simple DCF, even being really optimistic on 15% CAGR next 5 years with 0 capex also doesn't yield a price any higher than RM2.20. New players in the glove industry both locally and in China. You really gotta ask yourself, do you think that TG still can grow revenue and maintain margins as before? I personally don't think so, and there are further downside even when at RM2.20

"But what about covid profit? Must be worth something in the share price no? Share price must be higher than pre covid la." Yes, but no. Previous profit already accounted for in the cash balance of the company + any assets the company reinvested. For TG tho, not so much. Remember the special dividend they issued previously? All the buyback done by the company when it was RM6-ish? That's where all your covid profits went to, all the free cash flow being returned to shareholders already.

I'd be happy to be proven wrong, but if the next few quarters of profit continue to trend back to normality (the scenario that I think is most likely), TG is just gonna slowly trend towards sub RM2 no matter how many squiggly lines you draw on a chart. Even if there are sudden spikes in share price, it's not going to be long term

it seems nitrile glove price in november 21 was at pre-pandemic level. forecast q4/21 profit is >30% lower than q3/21.

gain of nitrile glove export were mostly from anhui and jiangxi province. it seems china producers have taken substantial market share from mys.

Catching a falling knife could end in injury.

For reasons, most herd members end in slaughterhouse or over the cliff.

In glove production, heating is a significant cost and not viable to run production line at below full capacity.

Given supply > demand in the industry, profit margin will likely razor thin and some may operate at losses.

Wahhh... why so not gentle comment?


Glove supplies have indeed increased tremendously the past few months.... all the big local players have had (in the midst) massive capex and we have many new players too locally...

Oversupply had always been part of the glove industry.

The small new players are really ikan bilis la ....

I remember when Covid first started, TG already announced plans that it will increase its gloves produstion from 75 Billion to 100 Billion in 2020.
By end this year, the target is supposed to be 120 billion.

120 billion gloves hor....

it's not something u can eat or every tom, dick and harry will buy.

LOL. So your point is........?

Glove asp is the product of demand and supply, and price trend in last few months said otherwise.

Media articles are for reading la...
It doesn't hurt to read more...

* you don't see some interesting points noted in the article? *

Buying/Selling based on media articles?
Adoiii..... you do things like this one meh?

if one knows glove industry long enough is aware profit margin is razor thin and many weren't profitable.

china customs data is not from media.

China customs data said otherwise. if you are vested then share price will reflect after next qr.

In time, share price will tell whose data is fake.

Then why bother with topg?

Then why bother with fundamentals?

If share price is not correlated to cagr or fundamental; how cagr could be relevant to #retailers?

According to a pren in the industry; the big 4 is operating at below 50% capacity and asp is either at breakeven or marginal loss, and the worst is yet to come.

airtawarian MedElite23 AVFAN don't blame me, i am only a messenger.

The share price will also continue to be press as many keeping under water share so whenever rises a batch will disposed.

This is going to be a long process

Supply will still >> demand

Even with consolidations, industry wide over capacity will remain; asp price will likely hover slightly above marginal cost i.e current profit level for a long long time.